Alberta’s President of Treasury Board and Minister of Finance Travis Toews held a press conference on Thursday, November 24 to provide the province’s mid-year fiscal update and economic statement.
The province is showing a projected surplus of some $12.3 billion for the 2022-2023 fiscal year, which ends March 31, 2023; while this is up from the $11.8 billion forecast in the 2022 provincial budget, it is down about $1 billion from the first quarter update in August which projected a $13.2 billion surplus at the time.
“We are seeing increased diversification in Alberta’s economy; energy prices continue to play a huge role in revenue projections, but corporate tax revenue is significantly higher than projected,” Minister Toews shared during a virtual media roundtable on Wednesday, November 30.
The province expects to collect some $76.9 billion in revenues, up about $14.3 billion than projected in budget 2022. This includes a forecasted $28.1 billion in revenue from non-renewable revenue resources, of which bitumen royalties make up some 70 per cent.
These revenues are projected to decrease somewhat in the coming fiscal years “as oil prices and demand softens,” but Alberta is still forecast to bring in some $19.2 billion in revenues in the 2023-2024 fiscal year, and some $16 billion in 2024-2025.
Expenses are forecast at some $64.6 billion--about $200 million higher than the previous 2021-2022 fiscal year, and about $2.5 billion more than projected in the 2022 budget.
Minister Toews acknowledged there are some challenges ahead for the province, and $1.3 billion has been set aside as a provision for affordability incentives to ensure low and middle-income Albertan households are not left behind; this includes $300 million to provide electricity rebates, and an additional $300 million to support families with children, seniors, and vulnerable Albertans.
In August, during the first-quarter update, former finance minister Jason Nixon announced a $1.7 billion investment of non-renewable resource revenue into the Alberta Heritage Savings Trust Fund.
During the second-quarterly update, Minister Toews shared this decision was deferred to “fit into our plan around the fiscal framework going forward” and not in a trade off for the newly announced affordability measures. He added this framework will help govern how future surpluses will be used, and some $5.8 billion in expected surpluses over the next three years is being set aside as part of this framework.
